SPECIAL DISTRICTS AVIK BONNERJEE, R.T.A. TOMMY LEE, R.T.A.

Types of Districts “General Law” Districts Drainage District (DD) “Special Law” Districts Levee Improvement District (LID) Navigation District (ND) Special Utility District (SUD) Irrigation District (ID) Stormwater Control District Municipal Utility District (MUD) Fresh Water Supply District (FWSD) Water Control & Improvement District (WCID) Municipal Management District (MMD) Groundwater Conservation (GCD) River or Water Authorities Soil And Water Conservation District The type of District will often dictate its authority and specific powers Irrigation District (ID) River Authority (RA) or Soil and Water Conservation District

HOW DO MUDs GET CREATED Legislative action Texas Commision on Enviromental Quality

District Boundaries Where are my Boundaries? Annexing Land Each district will have an approved map that depicts the established boundaries. The original boundaries were established at the creation of a district and may be expanded or reduced from time to time. In a petition to the board, a landowner(s) may request that land be added to the district. After a hearing, the board may add the land if certain conditions are met, including consent of the City in whose ETJ or corporate limits which the property is located. The addition must be advantageous to the district without injuring land already serviced by the district. Added to District’s tax rolls on the Jan 1 following annexation.

District Boundaries Excluding Land Before the board calls an election to authorize bonds, the board on its own motion may exclude land from the district if the exclusion is practical, just or desirable. Under certain circumstances, before the board calls a bond election, it may exclude land upon the petition of the owner of the land after a hearing held for such a purpose. An order excluding land may be subject to judicial review. If a district excludes land after a bond election but before issuance of bonds then the voted bonds are void and must be reauthorized A district may also exclude land once the district has no outstanding bonds.

Tax Rate Types Debt Service (I&S) –Used to pay bond payments on outstanding bonds Maintenance/ Operating (M&O) –Used to help fund District operations. Contract –Used to pay debts funded by contract between the District and other parties. Road –Used to pay bond payments for road bonds Park –Used to pay bond payments on park bonds

Special districts and bond issues DURING CREATION OF A SPECIAL DISTRICT, A MAXIMUM MAINTENANCE TAX IS DECIDED ON, BUT DEBT TAX IS NOT CAPPED THERE IS A MAXIMUM AMOUNT OF BONDS THAT A DISTRICT CAN SELL BEFORE HAVING TO HOLD AN ELECTION AND GET APPROVAL FROM THE TAXPAYERS

WHY ARE BONDS SOLD? In a new district, bonds are normally sold to reimburse the developer for the costs of the water plant, sewer plant and additional infrastructure

ANNEXATIONS CAN ALSO REQUIRE EXPANSIONS OF EXISTING PLANTS. In older special districts, many times bonds are sold to repair or replace older plants and infrastructure. ANNEXATIONS CAN ALSO REQUIRE EXPANSIONS OF EXISTING PLANTS.

UNEXPECTED EXPENSES LEGISLATIVE CHANGES MANDATED UPGRADES DISASTERS

WHEN IS IT TIME TO SELL BONDS… Once a developer has put enough value on the ground the special district can sell bonds to reimburse the developer. DISTRICT NEEDS FUNDS FOR CAPITAL EXPENSES BONDS CAN BE SOLD AT A 10:1 RATIO

TAX ASSESSOR’S ROLE IN BOND ISSUES ASSESSING VALUE AND WORKING WITH THE CENTRAL APPRAISAL DISTRICT IN NEWER SUBDIVISIONS, VERIFYING PARTIALLY COMPLETED HOMES ARE ADDED TOWARDS VALUE MAKING SURE ANNEXATIONS ARE RECORDED TIMELY

ITEMS PROVIDED BY THE TAX ASSESSOR ESTIMATE OF VALUE HISTORICAL VALUES, GROWTH, COLLECTIONS BREAKDOWN OF LAND AND IMPROVEMENTS EXEMPTION TYPES & AMOUNTS TOP 10 TAXPAYERS

A LETTER OF REPRESENTATION MUST BE SIGNED ONCE THE BOND IS REVIEWED, VERIFIED, AND COMPLETED AND IT CONTINUES THROUGH THE LIFE OF THE BOND AS A CONTINUING DISCLOSRE IS FILED ONCE A YEAR….

How it can Benefit your District/JURisdiction Sales & Use Tax How it can Benefit your District/JURisdiction

In 2002, Special Districts, such as municipal utility districts and emergency service districts formed strategic partnership agreements (SPA) or limited partnership agreements (LPA) with cities.

These agreements must be voted in by the taxpayers in the area.

Special districts, cities & the state comptroller work together in the collection & distribution of the revenue

THIS INCREASED THE SALES TAX IN THE AFFECTED AREAS BY 1% OF WHICH THE CITY RECIEVES ½% AND THE SPECIAL DISTRICT RECIEVES ½%

Are you still awake?

This benefits the districts to have another source of revenue other than ad valorem taxes

This extra revenue can and has helped districts beautify their area thus increasing value.

Or maybe something on a smaller scale

This extra revenue can also help jurisdictions lower their tax rate.

Harris County ID #18 Exxon Protest CAD Value – $1+billion Exxon Value - $600+ million Designated Area Other Taxes

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